Equipment decisions: Buy new or used, or rent?

Your equipment is aging. So should you buy new or used, or rent?

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Our 2013 Salary Survey (PW, April 2013) found that you’re still feeling the recession’s pinch. When money’s tight and work must get done, it can be hard to know what to do with an aging piece of equipment. Should you buy new or used? Or rent?

Every winter for more than a decade, a New York highway department rented a Hyundai Construction Equipment Americas Inc. wheel loader to help plow and remove an average of 33 inches of snow. Two years ago, as one of his three wheel loaders approached 15 years of service, superintendent Marc Pfeifer decided to replace it with the same model he had been renting.

“We only rent an extra wheel loader for the winter,” he says. “We have to have one because the town is big. I couldn’t see where it would be cost-effective to only rent.”

Pfeifer has worked for the Town of Poughkeepsie, N.Y., for 22 years, starting off as a laborer. In addition to snow removal, his 25 employees operate a solid waste transfer station, trim trees, clean catch basins, and build and maintain 148 miles of roads throughout a 30-square-mile service area. The department owns three wheel loaders, one excavator, and one backhoe; it does all maintenance in-house.

He gets much of his equipment from A. Montano Co. Inc. in Saugerties, which in addition to Hyundai, sells and rents JCB earthmoving and Sakai compaction equipment, Lay-Mor brooms and sweepers, Carlton Professional Tree Equipment chippers, and all related buckets, blades, hammers, thumbs, rippers, quick couplers, forks, and grapples.

That year he rented Hyundai model HL757TM-9. Luckily, the 170-hp machine was compatible with the forks, plows, and cages the town owned.

Coming to a decision

Credit: Public Works

That’s one reason he decided to use his annual New York State Consolidated Local Street and Highway Improvement Program (CHIPS) allocation to buy the same model. His crews liked the machine and their research found that the press surrounding it was positive.

“Some of Hyundai’s competitors tried to convince us their value was in their product’s resale,” Pfeifer says. “But we knew with good maintenance, we’d use the machine for 20 years. They’ve also mentioned the convenience of the scale — lifting up the bucket and knowing exactly how much weight it’s carrying. We have no problem lifting 5,000-pound catch basins. I like the backup camera.”

Because it can do so many jobs — lifting catch basins, loading trucks with salt, dirt, stone, and blacktop for roadwork or street cleaning, and removing tree limbs and other debris — buying the wheel loader made economic sense. When you can use a piece of equipment year-round, why rent?

As with anything that has a large impact on your department and community, weigh the pros and cons before making a final decision. Buying equipment can be an investment that will pay off in the long-run. Spending a little bit now can sometimes help your department if the piece of equipment makes you more efficient.

Devote extra time to research to help you come to the right conclusion. Talk to other departments, find out if there is something similar to the CHIPS program in your state, and pick what is best for your community.